Letter to shareholders 2021

Dear shareholders,

Just over 13 years ago we took our first steps by selling shoes out of a flat in Berlin. Today, we are proud to be a leading European platform for fashion and lifestyle with more than 17,000 employees, welcoming almost 3,000 new Zalandos in the last year alone. We serve more than 48 million active cus-tomers across 23 European countries offering global and local brands and joined the leading German stock market index, DAX, in September 2021.

Reaching these milestones provides an opportunity to reflect on our journey so far and look ahead at the substantial possibilities that still lie before us.

On October 1, 2014, we rang the bell at the Frankfurt Stock Exchange. At the time we had about 7,500 employees and about 15 million active customers in 15 countries. We have come a long way since, and our journey continues. We aim to be the Starting Point for Fashion and serve more than 10% of the total EUR 450bn European fashion market in the long term. Zalando can be the catalyst to transform how people experience and buy fashion, and how physical and digital experiences merge. And we aim to decouple our growth from the resources we use, turning Zalando into a sustainable fashion platform with a net-positive impact for people and the planet.

Our customers are at the heart of everything we do, and we strive continuously to delight them with choices for their wardrobe, lifestyle and self-care. We engage with our customers across multiple propositions like Fashion, Beauty, Pre-owned, Zalando Lounge and Zalando Plus and aim to offer the most extensive assortment and the most exclusive brand collaborations. Since October 2021, we are excited to offer Sephora’s prestige beauty brands in Germany, and soon in further markets. And recently we started offering Apple’s lifestyle products and accessories on our platform. As part of our vision we expanded our footprint across Europe, launching Zalando in six new markets in Central and Eastern Europe. Both our market expansion and the increasing penetration of our existing markets drove the growth of our active customer base. More than one million customers are now members of our Zalando Plus program, which offers the best Zalando experience possible and creates even more opportunities for our brand partners to engage with our most valued customers.

We are helping our brand partners and retailers succeed online, enabling them to drive their digital direct to consumer business via our Partner Program and Connected Retail offerings. Throughout 2021, we continued to support our brand partners and retailers through the lockdowns by providing them with direct access to millions of Zalando customers. Our Partner Program partners also leveraged our unique logistics infrastructure through Zalando Fulfillment Solutions. During the pandemic, many retailers were able to keep their brick-and-mortar stores up and running through our Connected Retail program. By the end of 2021, more than 5,800 brand partners and almost 7,000 stores leveraged our platform to drive their business and allowed us to become an even more attractive fashion and lifestyle destination for customers across Europe.

With our “It takes two – Attitude-Behavior Gap Report” we took a deep dive into what hinders customers from bringing their aspirations in sustainable fashion to life. We shared clear and actionable recommendations on how the industry and customers can close this gap together. We are taking steps to transform the fashion industry into a more diverse, inclusive and sustainable future because we believe it’s the right thing to do. On that path we are raising the bar for ourselves and for our partners with the aim to reimagine fashion for the good of all.

We are proud that last year our brand, logistic and packaging partners covering 51% of our supplier-related emissions have set science-based targets. We grew our sustainability assortment significantly, which accounted for 21.6% of our Gross Merchandise Volume, up from 16% in 2020.

In 2021 the COVID-19 pandemic still continued to evolve and to affect the lives of people across the globe. We therefore focused on the safety and health of all our employees as our number one priority. We facilitated remote working whenever possible, followed strict safety and hygiene measures at all our locations, performed more than 400,000 tests in 2021 and administered more than 6,000 vaccinations.

We are proud of our employees from over 140 nations that work closely together in the entire company. We know that our achievements are only possible thanks to our employees’ engagement and the passion for the work they do for our customers and partners every day.

Finally, we thank you for your support and welcome you and our employees, customers, partners, brands and communities to be part of our journey.

Berlin, February 28, 2022

Robert Gentz, David Schneider, Jim Freeman, David Schröder, Dr. Astrid Arndt